Charter Wins FCC Approval To Acquire Time Warner Cable And Bright House

Charter's merger with Time Warner Cable and Bright House Networks has won approval from the Federal Communications Commission, the agency announced this afternoon.

The FCC's move is not unexpected, given that FCC Chairman Tom Wheeler recently endorsed the deal with several major conditions. Broadly, for the next seven years Charter won't be able to impose data caps or charge subscribers based on the amount of data they consume. It also won't be allowed to charge Netflix and other companies extra fees to "interconnect" directly with Charter's servers. In addition, the company will be unable to impose programming terms that could harm over-the-top online video distributors.

The final order has not been released by the FCC, so more details about the terms remain unknown. The acquisitions, reportedly valued by Charter at around $67 billion, will extend the company's broadband footprint to around 30% of the country. Charter and Comcast combined will control around 70% of U.S. Internet connections faster than 25 Mbps -- the FCC's current definition of broadband.



Republican Ajit Pai dissented from the approval order -- not because he is worried the merger will be harmful, but because he disagrees with the conditions.

"Chairman Wheeler's order isn't about competition, competition, competition; it's about regulation, regulation, regulation," a spokesperson for Pai told The Hill. "It's about imposing conditions that have nothing to do with the merits of this transaction. It's about the government micromanaging the internet economy."

It's worth noting that Charter apparently disagrees that the conditions are unrelated to the merger. Last year, Charter publicly promised to avoid data caps as a merger term -- although for three years, not seven. The company also publicly promised it would not charge extra interconnection fees.

Consumer groups and some Charter business rivals also have criticized the merger -- although for different reasons than Pai. As recently as this week, the Stop Mega Cable Coalition (which includes companies like Dish and consumer advocacy organizations) met with FCC Commissioner Mignon Clyburn and other officials to discuss "the many harms that would result from this merger," according to a regulatory filing.

"The conditions proposed in the draft order do not fully prevent Charter from using its dominant position in the marketplace to thwart competition from OTT streaming services and stifle competitors in underserved, rural communities," the coalition wrote.

The coalition specifically asked the FCC to require Charter to offer cord-cutters the option to purchase standalone broadband service of at least 60 Mbps

It's not clear whether Charter plans to do so. The company said in a filing posted on Thursday that it currently offers a "competitive" standalone broadband service, and plans to offer a low-cost broadband option to "eligible low-income customers" for the next four years.

Despite its reservations, Public Knowledge said today that the conditions of the merger could "counter some of the worst harms associated with industry consolidation."

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